In Quality Services and Solutions Private Limited and Ors v QSS Inspection and Testing Private Limited and Ors, the plaintiffs, including Quality Services and Solutions, applied for urgent interim relief against the defendants, QSS Inspection and Testing and others. The plaintiffs accused the defendants of trademark and copyright infringement and passing off under, respectively, section 29 of the Trade Marks Act, 1999, section 55 of the Copyright Act, 1957 and section 27 of the Trade Marks Act, 1999.
The first plaintiff was a leading multinational company in the field of inspection, testing and certification. It had been using the trademark Quality Services And Solutions and its inhouse-developed QSS logo in 14 states since 1999. The second defendant started as an employee in one of its branch offices, Quality Services And Solutions (Gujarat), which was later converted to a franchise. He became the managing partner of the franchise, the fourth defendant, and in 2019 the managing director of the first plaintiff with a minority shareholding. When the branch became a franchise, the first plaintiff granted it limited rights to use the first plaintiff’s trademark in a 2004 memorandum of understanding.
In May 2022, the second defendant ceased to be a director of the first plaintiff after the second and third plaintiffs became majority shareholders. The first plaintiff applied for registration of the QSS logo in 2023, but an objection was raised in the examination report that an application for an identical or similar trademark had been filed in the name of the fourth defendant in November 2021. The plaintiffs sent a cease-and-desist notice to the defendants on becoming aware of this. The defendants falsely replied that their adoption of the mark was honest and made in good faith.
The second defendant, while still the first plaintiff’s managing director had registered its QSS logo in the name of the fourth defendant. The defendants, other than the first and fourth, were former associates of the first plaintiff who had allegedly infringed QSS’s intellectual property rights, registered its mark and created a domain name and website deceptively similar to those of the first plaintiff.
The defendants argued that QSS’s knowledge of their actions and lack of objection constituted acquiescence and waiver.
This barred the plaintiffs’ false infringement claims. In any event, the adoption by the defendants of the disputed mark was made in good faith. It was further contended that the memorandum of understanding between the parties had lapsed because no franchise fee had been fixed since 2007, and no working partnership had existed from 2010. The defendants lastly argued that the plaintiffs had not satisfied the requirement for pre-institution mediation set out in section 12A of the Commercial Courts Act, 2015.
The Bombay High Court’s decision was a balancing act between these claims and defences, between the need to protect QSS’s intellectual property rights and the necessity to follow procedural requirements. The court cited Chemco Plastic Industries Private Limited v Chemco Plast 1 as authority for the need to consider the plaintiff’s perspective on the urgency of interim relief and Patil Automation Private Limited v Rakheja Engineers Private Limited for the acceptance of an exception to section 12A of the 2015 act when an application had been made for urgent interim relief.
In granting the interim relief sought by the plaintiffs and ordering the defendants to stop using the plaintiff’s trademark and logo pending further hearings, the court acknowledged the strength of the plaintiffs’ case for trademark and copyright infringement. It recited the previous relationship and permissive use of QSS’s intellectual property under the memorandum of understanding, criticising the defendants’ actions as strong evidence of conflicts of interest. Rejecting the argument based on section 12A, the court found the plaintiffs’ case justified the grant of urgent relief. The potential irreparable harm to the plaintiffs overrode the defendants’ claims of acquiescence and waiver.
The decision in favour of QSS shows that in trademark disputes, courts will take into account the strength of allegations of infringement, prior relations, conflicts of interest and, above all, a lack of honesty.
Authors: Manisha Singh and Malyashree Sridharan
First Published by: IBLJ here